‘we’re positioned to win in EV space’

General Motors Co (NYSE: GM) is up nearly 10% this morning after the legacy automaker reported better-than-expected results for its fourth financial quarter.

General Motors stock up on strong guidance

The stock is up also because the car manufacturer issued upbeat guidance for the full year. GM expects between $6.0 a share and $7.0 a share of adjusted per-share earnings in 2023. In an interview with Yahoo Finance, CFO Paul Jacobson said:

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Demand for our vehicles remains strong. When you look at the quality of our launched, the pricing, we had a great December that capped off a great 2022, and 2023 is getting off to a good start as well.

The finance chief agreed that General Motors wasn’t baking in “any” recession in its future outlook. The automotive stock is now up about 15% for the year.

General Motors has no plans of layoffs

General Motors sold about 2.7 million vehicles in North America last year. Over the next two years, it plans on lowering costs by $2.0 billion but has no plans of resorting to layoffs to accomplish the said cost reduction, as per CFO Jacobson.

We’ll manage headcount through attrition and targeted hiring, but making sure that we’re monitoring costs so that if we do find ourselves in a situation where pricing weakens, we can react quickly.

Wall Street currently rates the General Motors stock at “overweight” on average.

General Motors’ Q4 financial highlights

• Net income printed at $2.0 billion versus the year ago $1.74 billion
• Per-share earnings also climbed significantly from $1.16 to $1.39
• Adjusted EPS printed at $2.12 as per the earnings press release
• Revenue jumped 28% on a year-over-year basis to $43.11 billion
• Consensus was $1.69 of adjusted EPS on $39.96 billion revenue

GM to invest in Lithium Americas Corp

Also on Tuesday, General Motors revealed plans of investing $650 million in Lithium Americas Corp (NYSE: LAC) in line with its broader EV ambitions. According to CFO Jacobson:

We’ve seen incredible demand for our EVs. We’ve seen consumers run towards them at current price levels. We think we’re positioned to win in the EV space both now and for the long term.

General Motors is committed to increasing its electric vehicle sales in North America to 1.0 million units annually by 2025.

Over the next three years, it also expects its profits from EVs to be comparable to gas vehicles as Invezz reported here. By 2035, it wants to be a pure-play EV company.

We think with the Ultium platform and with our scale of manufacturing, we can offer vehicles in different classes, segments, and price points that’re better than anything out there. And do it while hitting our margin targets.